Greek Cypriots have demolished a key section of the barrier dividing the island's capital city, Nicosia.
The Green Line has separated Cyprus's Greeks from the Turkish population since 1974, when Turkish troops occupied the north.
The work in Ledra Street began under cover of darkness and had not been publicised in advance.
But the Greek Cypriot authorities say Turkish troops must pull back before people can cross in either direction.
Ledra Street - a pedestrianised shopping area - would be the sixth crossing point on the divided island.
The move was welcomed by the Turkish Cypriot Prime Minister, Ferdi Sabit Soyer, as "a positive development".
The UN chief of mission, Michael Moller, also hailed it as "a positive contribution of great significance", the AFP news agency reported.
The street was cordoned off to allow heavy equipment and demolition crews to move into position.
A small crowd watched the action, applauding when work on tearing down the barrier began.
"This is a show of goodwill on our side to contribute positively to opening Ledra Street," government spokesman Christodoulos Pashardes told state television.
It used to be a bustling road in the heart of Nicosia's commercial district but for more than 40 years it has been blocked by a large wall and a viewing platform overlooking the demilitarised strip separating north from south.
In December a controversial bridge over the wall was removed
The structures have been replaced by plastic barricades.
The Turkish Cypriot breakaway state in the north is recognised only by Turkey.
In December the Turkish Cypriot authorities dismantled a controversial footbridge on Ledra Street, which was built in 2005. It had angered Greek Cypriots, who said it encroached into the UN buffer zone separating the two sides.
The Green Zone is policed by United Nations troops, amid barbed wire and dilapidated buildings with sand bags still sitting in the windows.
Cyprus was partitioned after a Turkish invasion in 1974, which came shortly after a Greek Cypriot coup backed by the military junta ruling Greece at the time.
Shortly before joining the European Union in 2004 the Greek Cypriots rejected a United Nations plan to reunify the island.
The BBC's Chloe Hadjimatheou says it will be a while before Ledra Street opens fully.
First the disused ordnance and derelict buildings will have to be made safe and then UN forces will have to establish a checkpoint to police the crossing.